Core Insights - The Beauty Health Company reported fourth quarter net sales of $83.5 million, a decrease of 13.8% compared to Q4 2023, and full year net sales of $334.3 million, down 16.0% year-over-year [10][3][4] - The company achieved an adjusted EBITDA of $9 million in Q4 2024, significantly up from $3.4 million in Q4 2023, driven by increased consumable sales and reduced operating expenses [2][10] - Gross margin improved to 62.7% in Q4 2024 from 47.2% in Q4 2023, attributed to lower inventory-related charges and a favorable shift towards consumable sales [10][3] Financial Performance - For Q4 2024, delivery systems net sales were $26.8 million, down from $44.6 million in Q4 2023, while consumables net sales increased to $56.7 million from $52.2 million [3][11] - The full year gross profit was $182.3 million, up from $155.1 million in 2023, with an adjusted gross margin of 62.0% compared to 62.8% in the previous year [10][3] - The net loss for 2024 was $(29.1) million, an improvement from $(100.1) million in 2023, reflecting reduced costs associated with the Syndeo Program [10][3] Operational Metrics - The company placed 1,087 delivery systems in Q4 2024, down from 1,551 in Q4 2023, and a total of 4,907 systems for the year, compared to 8,287 in 2023 [10][3] - The active install base grew to 34,735 units by the end of 2024, up from 31,446 units in 2023, contributing to the increase in consumable sales [4][3] - The company plans to transition its China market from a direct sales model to a distributor model in 2025 [4] Guidance and Future Outlook - For Q1 2025, the company expects net sales between $61 million and $66 million, with an adjusted EBITDA loss projected between $(6) million and $(4) million [8] - Full year 2025 guidance anticipates net sales of $270 million to $300 million and adjusted EBITDA of $10 million to $25 million, reflecting ongoing challenges in delivery systems sales [8][9] - The company aims to deepen partnerships and accelerate science-backed innovations in 2025 despite macroeconomic uncertainties [2]

Core Points - The Beauty Health Company will report its fourth quarter and full year 2024 financial results on March 12, 2025, after market close [1] - An investor conference call will be held at 4:30 p.m. Eastern Time following the results announcement [1] - A live webcast of the call will be available on the company's investor relations website, with a recording accessible three hours post-call [2] Company Overview - The Beauty Health Company (NASDAQ: SKIN) is a medtech and beauty company that provides millions of skin health experiences annually [4] - The company is known for its flagship brand Hydrafacial™ and other brands like SkinStylus™ and Keravive™, focusing on various skin health solutions [4] - The company emphasizes a commitment to positively impacting communities and the planet through mindful business practices [4]

Core Insights - The Beauty Health Company (SKIN) experienced a total revenue of $78.8 million for the quarter ending September 2024, reflecting a year-over-year decline of 19.1% [4] - The company's international revenue performance is critical for assessing its financial resilience and growth prospects, especially in the context of a globally interconnected economy [2][9] International Revenue Breakdown - EMEA contributed 20.43% of total revenue, amounting to $16.1 million, which was a slight miss compared to analyst expectations of $16.16 million. This represents a decline from $19.2 million (21.19%) in the previous quarter and $21.1 million (21.66%) in the same quarter last year [5] - Asia Pacific generated $10.8 million, accounting for 13.71% of total revenue, which was significantly below the expected $14.08 million, marking a decline from $13.6 million (15.01%) in the previous quarter and $24.7 million (25.36%) in the year-ago quarter [6] Revenue Forecasts - Analysts predict total revenue of $76.58 million for the current fiscal quarter, indicating a decline of 20.9% from the prior-year quarter. Expected contributions from EMEA and Asia Pacific are $16.2 million (21.2%) and $15.82 million (20.7%), respectively [7] - For the entire year, total revenue is forecasted at $327.38 million, a reduction of 17.7% from the previous year, with EMEA expected to contribute $68.27 million (20.9%) and Asia Pacific $57.88 million (17.7%) [8] Market Observations - The company's reliance on international markets presents both opportunities and risks, making it essential to monitor international revenue trends for future forecasts [9] - Wall Street analysts are closely observing these international revenue patterns, especially given the complexities of global interdependence and geopolitical issues [10]

Financial Data and Key Metrics Changes - Third quarter revenue was $78.8 million, representing a 19.1% year-over-year decline [29] - Adjusted gross margin improved to 69.5%, driven by lower inventory-related charges and a favorable sales mix [34] - Total operating expenses decreased by 10.6% to $62.2 million, reflecting successful expense management [35] Business Line Data and Key Metrics Changes - Global equipment sales declined by 45.9%, while consumable sales increased by 10.4% to $51.2 million [30][32] - In the Americas, non-Syndeo systems accounted for 38% of units sold, up from 33% in Q2 [17] - Total units sold worldwide during the quarter was 1,118, down from 2,140 units sold in Q3 2023 [30] Market Data and Key Metrics Changes - Revenue in APAC declined by 56.1%, with China accounting for $5.3 million, a 68.5% year-over-year decline [32][33] - Consolidated revenue in the Americas was roughly flat, up 0.3%, while revenue in EMEA declined by 23.6% [32] Company Strategy and Development Direction - The company is focusing on three core areas: sales execution, operational excellence, and financial discipline [9] - Plans to consolidate operations in the US and leverage partnerships in other regions to maximize shareholder value [12] - The strategy includes a tiered pricing approach for equipment sales to increase adoption among providers [15] Management's Comments on Operating Environment and Future Outlook - The current macro environment is challenging due to tightened credit and high interest rates, particularly affecting new device sales [8] - Management remains optimistic about the growth of consumables and is focused on long-term sustainable profitability [27] - The company is projecting full-year 2024 sales between $322 million to $332 million, with a year-over-year revenue decline expected in Q4 [39] Other Important Information - The company ended its partnership with Sephora, which is not expected to significantly impact revenue [75] - A one-time charge of $7.6 million was taken for exiting the manufacturing partnership in China [36] Q&A Session Summary Question: What regions or aspects of consumables performed better than expected? - Management noted strong consumable sales in the Americas and EMEA, with an increase in sales per device [44] Question: What is the outlook for device sales and when might they stabilize? - Management indicated that device sales are under pressure due to cautious provider spending and higher interest rates, with no immediate stabilization expected [46] Question: How will the consolidation of manufacturing impact operations? - The consolidation aims to improve quality and efficiency, with most production now occurring in Long Beach [45] Question: Is the company still committed to the Chinese market? - Management is evaluating global markets to determine where to invest for growth and where partnerships may be more beneficial [54] Question: What are the underlying demand trends for Hydrafacials? - Demand remains strong, particularly in the US medical channel, with increases in consumables per device [57] Question: How does the company plan to manage gross margin moving forward? - Management expects adjusted gross margin to improve in Q4 compared to last year, but to decline sequentially from Q3 due to higher overhead expenses [61] Question: What is the expected impact of interest rates on system sales? - Interest rates are a factor in provider purchasing decisions, and management is working on financing solutions to improve credit approvals [81]

Company Performance - Beauty Health Company (SKIN) reported a quarterly loss of $0.15 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.12, and a decline from earnings of $0.05 per share a year ago, representing an earnings surprise of -25% [1] - The company posted revenues of $78.8 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.29%, but down from year-ago revenues of $97.4 million [2] - Over the last four quarters, Beauty Health has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Beauty Health shares have lost approximately 43.4% since the beginning of the year, contrasting with the S&P 500's gain of 25.8% [3] - The current consensus EPS estimate for the coming quarter is -$0.06 on revenues of $90.45 million, and -$0.20 on revenues of $341.09 million for the current fiscal year [7] Industry Outlook - The Medical Services industry, to which Beauty Health belongs, is currently ranked in the bottom 45% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Beauty Health's stock performance [5]

Financial Performance - Net sales for the three months ended September 30, 2024, decreased by $18.6 million, or 19.1%, compared to the same period in 2023, totaling $78.8 million[109]. - Delivery Systems net sales fell by $23.4 million, or 45.9%, to $27.6 million, impacted by unfavorable macroeconomic conditions and a challenging year-over-year comparison due to the prior year's international launch of Syndeo[110]. - Consumables net sales increased by $4.8 million, or 10.4%, to $51.2 million, driven by increased placements of Delivery Systems[111]. - Net sales for the nine months ended September 30, 2024 decreased by $50.4 million, or 16.7%, compared to the same period in 2023, with Delivery Systems net sales decreasing by $63.4 million, or 39.1%[124]. - The company reported a net loss of $18.8 million for the nine months ended September 30, 2024, compared to a net loss of $90.7 million for the same period in 2023[123]. - The company reported a net loss of $18.8 million for the nine months ended September 30, 2024, compared to a net loss of $90.7 million for the same period in 2023[152]. Cost and Expenses - Cost of sales decreased by $71.8 million to $38.2 million, primarily due to the absence of charges related to the Syndeo Program in the prior year[112]. - Selling and marketing expenses decreased by $3.1 million, or 10.1%, to $27.6 million, representing 35.0% of net sales[113]. - Research and development expenses decreased by $0.7 million, or 39.7%, to $1.1 million, accounting for 1.4% of net sales[114]. - General and administrative expenses decreased by $3.5 million, or 9.6%, to $33.4 million, representing 42.4% of net sales[117]. - Gross profit for the three months ended September 30, 2024, was $40.6 million, compared to a loss of $12.6 million in the same period of 2023, resulting in a gross margin of 51.6%[112]. - Gross profit for the nine months ended September 30, 2024 increased by $20.5 million, or 18.8%, compared to the same period in 2023, with gross margin improving to 51.8% from 36.3%[126]. - Selling and marketing expenses for the nine months ended September 30, 2024 decreased by $20.7 million, or 18.4%, compared to the same period in 2023, primarily due to lower personnel-related expenses[127]. - Research and development expenses for the nine months ended September 30, 2024 decreased by $2.0 million, or 28.1%, compared to the same period in 2023, driven by lower personnel-related expenses[128]. - General and administrative expenses for the nine months ended September 30, 2024 decreased by $8.8 million, or 8.5%, compared to the same period in 2023, primarily due to lower personnel-related expenses and losses on asset sales[129]. Cash Flow and Liquidity - As of September 30, 2024, the company had cash, cash equivalents, and restricted cash of approximately $358.9 million, which supports ongoing operations and potential acquisitions[134]. - The company has sufficient liquidity to meet anticipated working capital requirements for at least the next 12 months[137]. - Net cash used for operating activities for the nine months ended September 30, 2024 was $0.3 million, compared to net cash provided of $26.9 million for the same period in 2023[153]. - Net cash used for investing activities for the nine months ended September 30, 2024 was $5.9 million, down from $29.3 million in the prior year[154]. - Net cash used for financing activities for the nine months ended September 30, 2024 was $157.6 million, compared to $6.1 million for the same period in 2023[155]. - During the nine months ended September 30, 2024, the company repurchased $192.3 million principal amount of its Notes for $156.1 million[141]. Strategic Initiatives - The Syndeo Program, which offered upgrades and replacements for existing devices, was completed as of September 30, 2024[105]. - The company continues to explore strategies to mitigate cost pressures, including potential price increases and optimizing supplier contracts[106]. - The company discontinued its trade-up program starting in 2024, which previously recognized approximately $12 million and $17 million in revenue for the nine months and year ended December 31, 2023, respectively[150]. - The company entered into an Amended and Restated Credit Agreement providing a $50.0 million revolving credit facility with a maturity date of November 14, 2027[144]. Market Conditions - The company faced macro-economic challenges that negatively impacted revenues in 2024, including potential recession and financial market instability[148]. - Interest income for the three months ended September 30, 2024 decreased by $1.9 million, or approximately 27.9%, compared to the same period in 2023, primarily due to lower average invested balances[119]. - The company recognized income of $0.4 million related to the change in the fair value of warrant liabilities for the three months ended September 30, 2024, a decrease of $5.4 million, or 91.6%, compared to the same period in 2023[120]. Other Financial Transactions - Other income, net for the nine months ended September 30, 2024 increased by $28.1 million compared to the same period in 2023, primarily due to a net gain related to the repurchase of Convertible Senior Notes[133]. - The cap price of the Capped Call Transactions is initially set at $47.94, representing a premium of 100% over the last reported sale price of the company's Class A Common Stock on September 9, 2021[142].

Financial Performance - Net sales for Q3 2024 were $78.8 million, a decrease of 19.1% compared to Q3 2023, primarily due to lower delivery systems net sales[5] - Gross margin improved to 51.6% in Q3 2024 from (12.9)% in Q3 2023, driven by the absence of prior year charges and lower inventory-related costs[5] - Adjusted gross margin increased to 69.5% in Q3 2024 from 62.5% in Q3 2023, attributed to lower product costs and a favorable shift towards consumable net sales[5] - The company reported a net loss of $(18.3) million in Q3 2024, significantly improved from a net loss of $(73.8) million in Q3 2023[5] - Adjusted EBITDA for Q3 2024 was $8.1 million, down from $9.1 million in Q3 2023, reflecting lower net sales but higher gross margin[5] - Net sales for the three months ended September 30, 2024, were $78.8 million, a decrease of 19.2% compared to $97.4 million for the same period in 2023[17] - Gross profit for the three months ended September 30, 2024, was $40.6 million, with a gross margin of 51.6%, compared to a gross loss of $12.6 million in 2023[21] - The net loss for the three months ended September 30, 2024, was $(18.3) million, compared to a net loss of $(73.8) million for the same period in 2023[22] - Adjusted EBITDA for the three months ended September 30, 2024, was $8.1 million, with an adjusted EBITDA margin of 10.2%, compared to $9.1 million and 9.3% margin for the same period in 2023[22] Sales and Market Dynamics - The company revised its full-year net sales guidance to $322 million – $332 million, reflecting continued pressure on delivery systems sales[7] - Total delivery systems sold in Q3 2024 were 1,118, down from 2,140 in the prior year period, indicating a challenging macroeconomic environment[5] - Active install base increased to 34,162 as of September 30, 2024, compared to 30,074 in the same period last year[4] - The company successfully launched the Hydralock HA Booster, contributing to growth in consumables sales[2] Operational Changes - The company centralized its global manufacturing footprint in Long Beach, California, concluding its relationship with a third-party manufacturer in China[2] - Total operating expenses for the three months ended September 30, 2024, were $62.2 million, down from $69.5 million in the same period last year[17] - The company incurred manufacturing optimization costs of $7.6 million during the three months ended September 30, 2024[22] Cash Flow and Assets - Cash, cash equivalents, and restricted cash at the end of the period were $358.9 million, down from $523.0 million at the beginning of the period[19] - Total assets decreased to $699.5 million as of September 30, 2024, from $929.1 million as of December 31, 2023[19] - Total liabilities decreased to $639.8 million as of September 30, 2024, from $869.7 million as of December 31, 2023[19] - The company reported a net cash used for operating activities of $0.3 million for the nine months ended September 30, 2024, compared to $26.9 million provided in 2023[20] Expenses and Financial Adjustments - Adjusted gross profit for the three months ended September 30, 2024, was $54.7 million, with an adjusted gross margin of 69.5%[21] - The company reported a significant increase in stock-based compensation expense, totaling $7.7 million for the three months ended September 30, 2024, compared to $8.2 million for the same period in 2023[22] - Interest expense for the three months ended September 30, 2024, was $2.5 million, down from $3.4 million in the same period in 2023[22] - The company experienced a foreign currency loss of $(2.3) million for the three months ended September 30, 2024[22] - The write-off of discontinued, excess, and obsolete products amounted to $2.0 million for the three months ended September 30, 2024[22] Strategic Focus - The company is focused on expanding its product offerings and enhancing its market presence through innovative skin health solutions[24] - The Beauty Health Company emphasizes its commitment to sustainability and positive community impact as part of its business strategy[24]

The Beauty Health Company (NASDAQ:SKIN) Q1 2024 Earnings Conference Call May 9, 2024 4:30 PM ET Company Participants Norberto Aja – Investor Relations Marla Beck – Chief Executive Officer Mike Monahan – Chief Financial Officer Conference Call Participants Oliver Chen – TD Cowen Allen Gong – JPMorgan Susan Anderson – Canaccord Genuity Olivia Tong – Raymond James Joe Federico – Stifel Korinne Wolfmeyer – Piper Sandler Operator Hello, and welcome to The Beauty Health First Quarter 2024 Earnings Conference Call ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Delaware 85-1908962 Commission File Number: 001-39565 Washington, D.C. 20549 FORM 10-Q The Beauty Health Company (Exact name of registrant as specified in its charter) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ...

Exhibit 99.1 BeautyHealth Reports First Quarter 2024 Financial Results Delivers first quarter net sales of $81.4 million; year-over-year operating expense improvement of $6.1 million Repurchases $192.3 million of convertible notes through May 8th Long Beach, Calif., May 9, 2024 – The Beauty Health Company (NASDAQ: SKIN) ("BeautyHealth"), home to flagship brand Hydrafacial, today announced financial results for the first quarter ended March 31, 2024. First quarter net sales of $81.4 million decreased (5.7)% ...